Nat'l Labor Coll., Inc. v. Hillier Grp. Architecture New Jersey, Inc., Civil Action No. DKC 09-1954

CourtUnited States District Courts. 4th Circuit. United States District Court (Maryland)
Writing for the CourtDEBORAH K. CHASANOW
Docket NumberCivil Action No. DKC 09-1954
Decision Date09 August 2012

NEW JERSEY, INC., et al.

Civil Action No. DKC 09-1954


Date: August 9, 2012


Presently pending and ready for resolution in this contract dispute is a motion to dismiss filed by third-party defendant TOLK, Inc. ("Tolk"). (ECF No. 52). The issues are fully briefed and the court now rules pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons that follow, the motion will be granted in part and denied in part.

I. Background

The background of this case was set forth in detail in a prior opinion, National Labor College, Inc. v. Hillier Group Architecture New Jersey, Inc., 739 F.Supp.2d 821 (D.Md. 2010), and will be repeated here only to the extent necessary to frame the relevant issues.

On August 30, 2003, Plaintiff National Labor College, Inc. ("Plaintiff"), entered into a contract with Defendant The Hillier Group Architecture, New Jersey, Inc. ("Hillier"), pursuant to which Hillier was to prepare architectural and

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engineering design documents ("A/E Documents") for the construction of a two-story, multipurpose building on Plaintiff's campus ("the Project"). Hillier subsequently contracted with Tolk to provide the mechanical, electrical, and plumbing design ("MEP design"), which was incorporated into the A/E Documents. Construction of the Project was scheduled to be completed by no later than December 8, 2005. Due to alleged defects in the A/E Documents (including the MEP design), and slow and inadequate responses to problems, completion was delayed by approximately ten months, resulting in economic damages to Plaintiff.

Plaintiff commenced this action against Hillier and Tolk on July 27, 2009, alleging (1) negligence against Hillier, (2) negligence against Tolk, (3) breach of contract against Hillier, (4) breach of contract against Tolk (under a third-party beneficiary theory), and (5) common law indemnification against Hillier. Both defendants moved to dismiss. By a memorandum opinion and order issued September 14, 2010, the court granted in part and denied in part Hillier's motion and granted Tolk's motion in full. As relevant here, the court found that "the economic loss rule applie[d] to preclude Plaintiff's tort/negligence cause of action against Tolk," National Labor College, 739 F.Supp.2d at 834, and that because Plaintiff was an incidental, rather than intended, beneficiary of the

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Tolk/Hillier contract, a breach of contract claim under a third-party beneficiary theory could not be sustained, id. at 835-36. The only surviving claims were Plaintiff's breach of contract and/or negligence claims against Hillier.1

Hillier answered the complaint on January 10, 2011, and a scheduling order was issued. Following multiple consent motions for modification of the scheduling order, Hillier filed a third-party complaint against Tolk on August 29, 2011. (ECF No. 41). The third-party complaint recites that "a large portion of the damages suffered by [Plaintiff], as alleged in its complaint, [was] caused by [Tolk's] actions, errors and omissions on the Project work." (Id. at ¶ 14). Thus, Hillier claims entitlement to "contractual indemnity (express and implied), common law indemnity, and contribution for all damages that [Plaintiff] seeks against Hillier." (Id. at ¶ 15).

In response, Tolk filed the pending motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 52). Hillier has opposed that motion (ECF No. 53), and Tolk has filed a reply (ECF No. 54).

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II. Standard of Review

The purpose of a motion to dismiss under Rule 12(b)(6) is to test the sufficiency of the complaint. Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006). A plaintiff's complaint need only satisfy the standard of Rule 8(a), which requires a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). "Rule 8(a)(2) still requires a 'showing,' rather than a blanket assertion, of entitlement to relief." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 n. 3 (2007). That showing must consist of more than "a formulaic recitation of the elements of a cause of action" or "naked assertion[s] devoid of further factual enhancement." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations omitted).

At this stage, the court must consider all well-pleaded allegations in a complaint as true, Albright v. Oliver, 510 U.S. 266, 268 (1994), and must construe all factual allegations in the light most favorable to the plaintiff, see Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir. 1999) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993)). In evaluating the complaint, the court need not accept unsupported legal allegations. Revene v. Charles Cnty. Comm'rs, 882 F.2d 870, 873 (4th Cir. 1989). Nor must it agree with legal conclusions couched as factual allegations,

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Iqbal, 556 U.S. at 678, or conclusory factual allegations devoid of any reference to actual events, United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979); see also Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged, but it has not 'show[n] . . . that the pleader is entitled to relief.'" Iqbal, 556 U.S. at 679 (quoting Fed.R.Civ.P. 8(a)(2)). Thus, "[d]etermining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id.

In the instant motion, Tolk argues, inter alia, that Hillier's third-party complaint is time-barred. The statute of limitations is an affirmative defense that a party typically must raise in a pleading under Fed.R.Civ.P. 8(c) and is not usually an appropriate ground for dismissal. See Eniola v. Leasecomm Corp., 214 F.Supp.2d 520, 525 (D.Md. 2002); Gray v. Metts, 203 F.Supp.2d 426, 428 (D.Md. 2002). Nevertheless, dismissal may be proper "when the face of the complaint clearly reveals the existence of a meritorious affirmative defense." Brooks v. City of Winston-Salem, N.C., 85 F.3d 178, 181 (4th Cir. 1996).

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III. Analysis

Tolk argues that dismissal of the third-party complaint is warranted for essentially four reasons: (1) Hillier failed to seek leave prior to filing the third-party complaint; (2) Hillier's claims are time-barred; (3) Hillier failed to plead satisfaction of a condition precedent to filing suit; and (4) Hillier failed to state a claim upon which relief may be granted. Each of these arguments will be addressed, in turn.

A. Failure to Seek Leave

The third-party complaint was filed more than fourteen days after Hillier filed its original answer to Plaintiff's complaint. Thus, pursuant to Fed.R.Civ.P. 14(a)(1), Hillier was required to obtain leave to file it, which it failed to do. According to Tolk, this omission is "fatal" because it "takes away [the] [c]ourt's discretion" to grant or deny leave. (ECF No. 54, at 5-6).

While the language of Rule 14(a)(1) is mandatory - i.e., it provides that "the third-party plaintiff must, by motion, obtain the court's leave if it files the third-party complaint more than 14 days after serving its original answer" - the failure to file a motion for leave does not deprive the court of discretion. A third-party complaint filed without leave more than fourteen days after the original answer "is subject to a motion to strike or vacate under Rule 14(a)(4), which provides

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that 'any party may move to strike the third-party claim, to sever it, or to try it separately.'" 6 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1454 (3d ed. 2010); see also Sullivan v. Limerick Golf Club, Inc., Civ. No. 06-4680, 2008 WL 2502133, at *1 (E.D.Pa. June 23, 2008). In considering such a motion, the court has "discretion to strike the third-party claim 'if it is obviously unmeritorious and can only delay or prejudice disposition of plaintiff's claim." Id.; see also Evans v. Allen-Williams Corp., Civ. A. No. 1988-75, 1997 WL 195449, at *3 n. 3 (D.Vi. Mar. 7, 1997). As this language suggests, it is potential prejudice to the plaintiff in the underlying suit, not to the third-party defendant, that is the primary consideration in this analysis. See, e.g., Con-Tech Sales Defined Ben. Trust v. Cockerham, 715 F.Supp. 701, 703 (E.D.Pa. 1989) ("In exercising its discretion [on a motion for leave to file a third-party complaint], the court should consider (1) the possible prejudice to the plaintiff; (2) complication of issues at trial; (3) probability of trial delay; and (4) timeliness of the motion to implead."). Indeed, this is necessarily so because "the third-party defendant is not, at the time application for leave is made, a party." Pantano v. Clark Equipment Co. , 139 F.R.D. 40, 42 (S.D.N.Y. 1991) (quoting Hensley v. United States, 45 F.R.D. 352, 353 (D.Mont. 1968) (internal marks omitted)).

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In its reply papers, Tolk suggests, in passing, that the third-party complaint is "futile and should therefore be stricken" (ECF No. 54, at 6), but it has not...

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